"Koch Brother Who Called Cape Wind a ‘Sweetheart Deal’ Slapped With $550,000 Fine For No-Compete Contracts"

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Bill Koch celebrates his 1992 yachting win. He claims yachting will be destroyed by offshore wind.

by Michael Conathan

This doesn’t qualify as much of a news flash, but just in case you were curious, hypocrisy is alive and well in the Koch family. And this time it’s going to cost one of them half a million dollars.

After a lengthy series of lawsuits he filed against his better known brothers, Bill Koch has often been described as the “black sheep” of his family. And while Bill’s public and messy falling out with his $50 billion brothers has led to only a slightly less lucrative career as founder of the dirty energy conglomerate Oxbow Carbon, he has largely steered clear of his siblings extreme climate denial and political wrangling. Except when it comes to one pet peeve: offshore wind.

Earlier this year, Cape Wind became the first offshore wind farm to receive the green light from federal regulators despite Koch’s funneling over $1.5 million dollars to a nonprofit group, the Alliance to Protect Nantucket Sound, formed to combat Cape Wind. The site where the project will be built just happens to be visible from backyard of Koch’s mansion on a private island country club community in Osterville, MA. One of the favorite arguments used by Koch and the Alliance is that the project was the beneficiary of a “sweetheart, no-bid deal.”

Apparently, Koch only likes sweetheart no-bid deals for his own operations. Last week, Gunnison Energy, a subsidiary of Oxbow Carbon, was slapped by the Justice Department with a $550,000 fine “related to an agreement not to compete in bidding for four natural gas leases sold at auction by the U.S. Department of Interior.”

According to the complaint, [Gunnison Energy] and [co-conspirator SG Interests VII Ltd.] were separately developing natural gas resources in Western Colorado. In 2005, GEC and SGI entered into a written agreement under which they agreed that only SGI would bid at the auctions and then assign an interest in the acquired leases to GEC…. As a result of the agreement between GEC and SGI, the United States received less revenue from the sale of the four leases than it would have had SGI and GEC competed at the auctions.

Not, of course, that Bill Koch has ever been interested in allowing the federal government to get its fair share. His run to capture the America’s Cup yachting trophy in 1992 was fueled by tax breaks from donating his own money to a foundation set up to fund his pursuit of the prize. The donations saved him “a couple million dollars” on his taxes.

It should come as no surprise that a dirty energy magnate with a history of bilking the federal government might try to pull a fast one on federal regulators. Let’s just make sure we remember this one next time he accuses a clean energy company of working the system.

Michael Conathan is the Director of Ocean Policy at American Progress.